Transforming growth factor-betas (TGF-betas) are potent inhibitors of epithelial cell growth. Recently the type II TGF-beta receptor has been shown to be diminished or absent in a number of human malignancies, implicating loss of TGF-beta function as one mechanism contributing to tumor development. We have tested the importance of the TGF-beta system in epithelial homeostasis in vivo by generating transgenic animals locally overexpressing a dominant negative mutant form of the type II TGF-beta receptor (DNR) in order to knock out response to TGF-beta in select epithelia. High level expression of the DNR construct in the exocrine pancreas results in progressive atrophy of the acinar compartment, associated with ductal metaplasia and fatty replacement. Enhanced proliferation of acinar cells is observed, consistent with a key role for endogenous TGF-betas in limiting proliferation and maintaining structural integrity of the exocrine pancreas. Overexpression of the DNR in the mammary glands results in increased lobulo-alveolar side-branching and, importantly, in an enhanced susceptibility to tumorigenesis induced by the carcinogen dimethylbenzanthracene. Similarly, introduction of the DNR into a premalignant rat prostate cell line causes the cells to become tumorigenic in nude mice. These studies provide the first in vivo demonstration of the tumor suppressor function of the TGF-beta receptor. We have also shown that loss of just one TGF-beta1 allele is sufficient to cause increases in cell turnover rates and enhanced susceptibility to tumorigenesis in the liver and lung of genetically modified mice. Since the resulting tumors retain the remaining wildtype TGF-beta1 allele, this distinguishes TGF-beta1 from classical tumor suppressor genes. We are currently analyzing the underlying molecular mechanisms. Results from all these experiments should give clinically useful insights into the physiological functions of TGF-betas during tumor initiation, promotion and progression, and illuminate how the system could be most effectively used in novel chemopreventive strategies.